Not upheld: Travel / life insurance claim disputes complaint against Gresham Insurance Company Limited

Decision detail

Summary

Mr M claimed on his home buildings insurance for the cost of repairing a drain that was incorrectly connected during an extension installation several years earlier. The water company identified the misconnection was causing foul waste to pollute a nearby river and made Mr M responsible for fixing it. Gresham declined the claim citing a policy exclusion for damage caused by faulty design and poor workmanship, and paid £100 compensation for claims handling delay. The ombudsman upheld Gresham's decision, finding the exclusion clearly applied to the misconnection caused by the contractor's poor workmanship, and that the compensation was reasonable despite Mr M's inability to pursue the now-liquidated contractor.

The Ombudsman's reasoning

The ombudsman applied the principle that policyholders must show they have suffered an insured loss, and insurers can rely on policy exclusions to decline claims. The drain misconnection was caused by faulty design and poor workmanship by the contractor, which falls squarely within the policy exclusion that applies across all parts of the policy. Although Mr M cannot pursue the contractor due to liquidation, this does not change the fact that the proximate cause of the damage falls within an excluded category. The £100 compensation was reasonable for the minor claims handling delay.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website